Final Minimum Wage Rules Filed by BOLI

This post has been contributed by our strategic partner Cascade Employers Association. Cascade is an exceptional, membership-based resource for Northwest employers committed to developing a strong, vital workforce. They offer a complete range of services — from hiring well, to training for excellence, to dismissing effectively.

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

On June 15, 2016, BOLI filed its final minimum wage rules. The primary subject of both the proposed and final rules is how to determine an employer’s location for purposes of the new minimum wage law. As a reminder, the law created three different minimum wage regions: Non-urban counties (Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler), the Portland Urban Growth Boundary, and everywhere else.

The final rules use an entirely different method for determining an employer’s location than what was put forth in the proposed rules.

Under the proposed rules, an employee would be paid at the rate of pay for the region where the employer is located, unless the employee worked more than an incidental amount of time in a different region. An incidental amount of time was defined as working less than four hours of compensable time in a region during any workweek. Additionally, driving through a different region with no employment or work-related stops was considered incidental.

The final rules do away with the concept of incidental time. Instead, the rules create the concept of a fixed employer location. An employer can pay an employee based on the region where its fixed location is – regardless of whether work is performed in another region – in either of two scenarios. The first scenario occurs if an employee performs more than 50% of his or her work at the fixed location during a pay period. The second scenario occurs if an employee who makes deliveries begins and starts his or her work day at that fixed location.

If neither of these scenarios apply, then the employer must pay the employee in one of two ways. One option is to pay the employee for all the employee’s work at the highest minimum wage for the regions in which the employee works. The second option is to track where the employee performs work and pay the employee at least the minimum wage for each region where the work is performed.

It is important to note that under the proposed rules, the minimum wage region was determined on a weekly basis. Under the final rules, the region is determined on a pay period basis, which could be weekly, biweekly, semimonthly, or monthly.

For any organization that has minimum wage employees, these rules will likely affect your pay practices, time tracking, how you assign work, and potentially the pay periods you choose.

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